Today's CPI Press Release says Year-over-year CPI rose at a 2.1% rate
On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in February, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the index increased 2.1 percent before seasonal adjustment.My 5-yr TIPS with a 1.25% base rate will earn 3.35% at this rate of inflation
Not seasonally adjusted CPI measures: The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.1 percent over the last 12 months to an index level of 216.741 (1982-84=100). For the month, the index was unchanged prior to seasonal adjustment.
My 20-yr TIPS with a 1.375% base rate will earn 3.475% at this rate of inflation
In my other newsletter, The Retirement Advisor, we recommended Vanguard's TIPS fund, VIPSX, over Vanguard's GNMA fund last year.
Vanguard's GNMA fund, VFIIX currently at $10.82, currently yields 3.16% and will lose NAV (net asset value) if inflation spikes in the future. It will gain NAV if we see deflation and rates drop.
ECRI says we have begun a cyclical upturn in inflation. That doesn't mean we will get hyper (over 10%) inflation, but it means deflation is off the table.
- April 03, 2009: Upturn in ECRI's WLI Growth Rate Says US Business Cycle Recovery Ahead
- February 05, 2010: ECRI Global Inflation Outlook - Higher Inflation Ahead
- in 2009 Vanguard's TIPS fund, VIPSX, gained 10.8%
- in 2009 Vanguard's GNMA fund, VFIIX, gained 5.3%
- October 25, 2009: Bob Brinker's GNMA VFIIX Bond Fund Timing Advice & My Alternatives